Bovis Homes share price dips despite boost from UK house prices

Having previously worked at Property Week and Management Today, my areas of expertise are housing, entrepreneurs and leadership, as well as cars and the automotive industry. In 2015 I won the British Media Awards' Rising Star of the Year award.

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The UK's housebuilding boom has put Bovis on the right track (Source: Getty)

Shares in Bovis dipped 1.43 per cent to 1,183p this morning, despite its half-year results showing a sizeable boost from the strength of the UK's housing market.

The figures

Revenues at the housebuilder rose nine per cent to £350.7m in the six months to the end of June, the company said this morning, while profit before tax also jumped nine per cent to £53.8m.

It added that the 1,525 homes it completed on during the period (up from 1,487 during the same period last year) was a record, while the average £264,200 asking price of one of its homes was 10 per cent higher than the £239,500 it made last year.

Meanwhile, its land bank rose to 19,081 plots at 135 sites, up from 18,062 plots at 128 sites during the same period last year.

Net debt rose to £58.8m, up from £45.3m - but basic earnings per share rose 11 per cent to 31.1p.

But even when that does come, it's unlikely to dent Bovis and its ilk too much. With the UK in the throes of a housing crisis, housebuilders can't build fast enough - and after the decisive Conservative win at the election, house buyers have lost any uncertainty over the conditions in the market.

What Bovis said

David Ritchie, the housebuilder's chief executive, said:

For 2015, we are on track to deliver our expected volume of new homes and remain confident in our outlook for the year as a whole. The combination of strong revenue growth and higher profit margins with improved capital efficiency will drive higher capital turn and return on capital employed.

In short

With the UK's housing market desperate for more supply, housebuilders such as Bovis are cashing in.